A spending review from the Department of Public Expenditure has branded the funding of multiple enterprise agencies as “potential harmful climate supports”.

Budgets for IDA Ireland (€238m), Enterprise Ireland (€220m), Bord Bia (€55m) and the Tourism Marketing Fund (€63m) are singled out.

Report authors Laura Kevany and Niamh Foley explain: “As the primary purpose of these agencies is to promote the growth of their respective sectors, it is difficult to conclude anything but that this expenditure will lead to a net growth in greenhouse gas emissions.

“However, all of these agencies also offer explicit supports for improving the efficiency and sustainability of their sectors, likely limiting the increases in emissions.

“Since funding for each of the agencies comes through a single sub-head it is impossible at this point in time to separate potentially harmful spending from potentially beneficial spending and hence the inclusion of the full cost of the agencies in this table likely overstates climate harmful spending.”

The department review - A Review of Fossil Fuel Subsidies and other Potentially Climate Harmful Supports – is part of the fifth tranche of papers developed as part of the 2022 spending review process.

The department said the Fossil Fuel Subsidies paper represents the first step in fulfilling the Climate Action Plan commitment to develop and apply definitions to identify and track government spending that may be having a negative impact on climate outcomes.

Other potentially climate harmful supports identified by Paschal Donohoe’s department include subsidies for regional airports (€28m) and two large social protection programmes - the Household Benefits Package (€87m) and the Fuel Allowance (€250m).

Minister Donohoe commented: “In line with overall objectives, Spending Review 2022 continues to examine policies and programmes to support evidence-informed policy making. The publications provide valuable insights across the policy areas in question, and add to building the evidence base across the Civil Service.”

The Fossil Fuel Subsidies paper considers the most appropriate definition for identifying fossil fuel subsidies and other supports which are likely to lead to increased greenhouse gas emissions in an Irish context.

According to the Donohoe’s department: “In line with the reporting on climate-related expenditure, this definition has been applied to identify fossil fuel and other potentially climate harmful supports that will take place in 2023 on a subhead-by-subhead basis across government departments.

“It is intended to incorporate this work into formal reporting, including through publication in future iterations of the Revised Estimates Volume.”

In their analysis, the report authors state that their paper represents a first step in the process of identifying potentially climate harmful Exchequer supports.

"While international estimates are available for the level of fossil fuel subsidisation, this paper goes beyond this by identifying wider supports that result in non-CO2 emissions," they write.

"This was deemed appropriate based on Ireland’s commitment to achieving a ‘climate neutral economy’ by 2050, where greenhouse gas emissions are balanced or exceeded by the removal of greenhouse gases.

"Our methodology is therefore based on those available to estimate fossil fuel subsidies and potentially environmentally damaging supports. Further refinement of the methodology will take place as further research is conducted internationally."

Reporting: Business Plus